Friday, March 06, 2015

Dean Baker on over-valued dollar

"I will give a quick response to the argument by Yanis Varoufakis raised in the comments. I think Varoufakis is mistaken. They are no secret conspiracies here, everything is pretty much right on the table. There are segments of the elites that stand to gain from an over-valued dollar. This includes businesses that are outsourcing to get cheap labor and retailers like Walmart who undercut competitors by setting up low cost supply chains in the developing world. Finance also tends to be happier with a dollar that goes farther overseas and less inflationary pressure at home.

The economy as a whole does not in any way need an over-valued dollar, nor does the U.S. uniquely "benefit" from some special privilege as the world's reserve currency." according to Dean Baker. For future reference since I am not sure whether the US government wants it or not.
P.S. A long term view here.